Podcast: Updated weekly in the wee hours of Sunday night/Monday morning. Subscribe on Stitcher, Spreaker, Apple Podcasts, Google Podcasts, or iHeartRadio
Our weather word of the day is giddy, which after this past winter is the only way one could possibly feel about the pending "72 degrees and sunny" in the forecast for the next two days.
This ought to put a new spin on a subject we've talked about many times -- but yet still haven't discussed enough. As you may know, the Federal debt totals $10,983,549,928,728.74. Divide that evenly among the 306,016,589 people living in the US, and that leaves each of us with a personal share of the Federal debt equal to $35,892.05. But let's add another dimension to that: At last count, China held $787.4 billion in US Treasury bills and notes. Considering that the government there has final say over who owns what, that $787.4 billion is money being lent to us by the Chinese government. Again assuming that there are 306 million of us dwelling in the US and sharing responsibility for the debt, that means every single one of us is accountable for $2,377 in debt to the Chinese government. So when China's prime minister steps in front of the microphones and says he's not sure we're good for it, we ought to start paying a lot more attention. There's no doubt that China's possession of all that debt means that we have fewer options than we'd otherwise have at our disposal to respond to their military aggression. Debt ties our hands and could make it impossible for us to defend Taiwan in case China decides to pursue an aggressive re-integration. And if we're not going to be able to stand behind commitments to protect allies like Taiwan, what exactly does that say to other allies like South Korea and Japan, which also depend upon the umbrella of US defense protection. Our debt has become a destabilizing force for our national security. If you haven't seen "IOUSA" yet, then please at least watch the 30-minute version. It's absolutely worth every second of your attention. At the very least, watch the segment on trade imbalances from "IOUSA".
By the way, it should be noted that the answer is not for us to start putting up trade barriers -- that's only likely to make our lives worse. (Trade wars would be especially bad for Iowa -- the threat of new restrictions on agricultural exports from here to the EU could be nasty for our state.) But we do have to start balancing our consumption with our production. Government needs to take the lead by bringing the budget into balance, but businesses and households need to do the same. It's imperative that we get a grasp on the situation, and pronto.
It may sound funny to talk about using GPS to guide lawn mowers, but in reality it's an incremental step towards the day when tasks like lawn mowing will be handled not by people, but by machines. The push-reel mower was a huge step up from the scythe (or the goat), and we should anticipate the arrival of things like mowing robots with the same enthusiasm.
Here's a new campaign I'm going to start promoting: We should get rid of "management" as a major and replace it with something I'll call "DPI" - the development and preservation of institutions. The debt crisis we face is a problem for the public sector, the private sector, and the household sector alike. And much of it can be blamed on the very short-term thinking that has pervaded business management, government work and politics, and household budgeting alike. We need to start talking about long-term ways to preserve and develop our institutions, whether they're businesses, non-profit groups, or government. People care about their institutions far more than we normally realize. That's why there's such an uproar right now over the sale of the naming rights to the Sears Tower. Who cares? It turns out, lots of people do...because our institutions -- even down to the names of our local buildings -- help create our identities and form our memories. But if we're not trying to make those institutions strong and vibrant, then we're only ensuring that they'll be eclipsed by something else someday. Sure, sometimes we need some creative destruction. But business failures hurt people, and it's much better for those institutions to evolve than to fail.
Keywords in this show: agriculture • bankruptcies • biodiesel • business failures • China • debt • defense • diplomacy • DPI (development and preservation of institutions) • European Union • exports • Federal debt • GPS • institutions • international affairs • IOUSA • Iowa • Japan • lawn mowers • management • naming rights • national security • protectionism • Sears Tower • South Korea • Taiwan • technological progress • technology • trade • trade barriers • Treasury bills • weather